Form 424B7
PROSPECTUS
GEOGLOBAL
RESOURCES INC.
COMMON
STOCK
This
prospectus relates to the resale from time to time by the holders of an
aggregate of 6,573,744 shares of our common stock, including 4,252,400 shares
that are issued and outstanding, 195,144 shares issuable on exercise of our
outstanding compensation options and 2,126,200 shares that are issuable on
exercise of common stock purchase warrants. We will not receive any of the
proceeds from the sale of the shares sold pursuant to this prospectus. We will
bear all of the expenses incident to the registration of the
shares.
This
prospectus also relates to the resale from time to time of by the holders of
an
aggregate of 1,304,150 shares of our common stock, including 785,500 shares
issuable on exercise of outstanding common stock purchase warrants, sold in
a
private sale of our securities in December 2003. These shares were first
registered by us under the Securities Act of 1933, as amended (the “Securities
Act”), in a registration statement declared effective by the Securities and
Exchange Commission on June 14, 2004.
Our
common stock is traded on the American Stock Exchange under the symbol GGR.
On
January 13, 2006, the closing sale price of our common stock on the American
Stock Exchange was $9.94.
See
“Risk Factors” on page 7 for information you should consider before buying
shares of our common stock.
We
expect
that these shares of common stock may be sold or distributed from time to time
by or for the account of the holders through underwriters or dealers, through
brokers or other agents, or directly to one or more purchasers, including
pledgees, at market prices prevailing at the time of sale or at prices otherwise
negotiated. The holders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus. The registration of these
shares for resale does not necessarily mean that the selling securityholders
will sell any of their shares. See “Plan of Distribution” beginning on page
22.
Neither
The Securities And Exchange Commission Nor Any State Securities Commission
Has
Approved or Disapproved These Securities Or Determined That This Prospectus
Is
Truthful Or Complete. Any Representation To The Contrary Is A Criminal
Offense.
Prospectus
dated January 25, 2006
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TABLE
OF CONTENTS
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Prospectus
Summary
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Prospectus
Summary
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4
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Risk
Factors
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7
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Risks
Relating to Our Oil and Gas Activities
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Because
We Are In the Early Stage of Developing Our Activities, There
Are
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Considerable
Risks That We Will Be Unsuccessful
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7
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Our
Interests In the Production Sharing Contracts Involve Highly
Speculative
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Exploration
Opportunities That Involve Material Risks That We Will
Be
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Unsuccessful
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8
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Possible
Inability of Contracting Parties to Fulfill Phase One of the Minimum
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Work
Program for the KG Block
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8
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Because
Our Activities Have Only Recently Commenced And We Have No
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Operating
History And Reserves of Oil and Gas, We Anticipate Future
Losses;
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There
Is No Assurance of Our Profitability
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9
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We
Expect to Have Substantial Requirements For Additional Capital That
May
Be
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Unavailable
To Us Which Could Limit Our Ability To Participate In Our Existing
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Ventures
Or Pursue Other Opportunities. Our Available Capital is
Limited
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10
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India’s
Regulatory Regime May Increase Our Risks And Expenses Of Doing
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Business
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11
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Our
Control by Directors and Executive Officers May Result In Those
Persons
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Having
Interests Divergent From Our Other Securityholders
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12
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Our
Reliance On A Limited Number Of Key Management Personnel Imposes
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Risks
On Us That We Will Have Insufficient Management Personnel
Available
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If
The Services Of Any Of Them Are Unavailable
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12
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Our
Success Is Largely Dependent On The Success Of The Operators Of
The
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Ventures
In Which We Participate And Their Failure Or Inability To Properly
Or
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Successfully
Operate The Oil And Gas Exploration, Development And
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Production
Activities On An Exploration Block, Could Materially Adversely Affect
Us
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12
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Certain
Terms Of The Production Sharing Contracts May Create Additional
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Expenses
And Risks That Could Adversely Affect Our Revenues And
Profitability
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13
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Oil
And Gas Prices Fluctuate Widely And Low Oil And Gas Prices
Could
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Adversely
Affect Our Financial Results
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14
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Our
Ability To Locate And Participate In Additional Exploration Opportunities
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And
To Manage Growth May Be Limited By Reason Of Our Limited History
Of
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Operations
And The Limited Size Of Our Staff
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15
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Our
Future Performance Depends Upon Our Ability And The Ability Of The
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Ventures
In Which We Participate To Find Or Acquire Oil And Gas Reserves That
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Are
Economically Recoverable
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15
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Estimating
Reserves And Future Net Revenues Involves Uncertainties And
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Oil
And Gas Price Declines May Lead To Impairment Of Oil And Gas
Assets
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16
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Risks
Relating To The Market For Our Common Stock
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Volatility
Of Stock Price
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17
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Cautionary
Statement for Purposes of The “Safe Harbor” Provisions
of
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The
Private Securities Litigation Reform Act of 1995
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18
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Use
Of Proceeds
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19
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Selling
Securityholders
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20
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Plan
of Distribution
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22
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Legal
Matters
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24
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Experts
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25
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Where
You Can Find More Information
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25
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You
should rely only on the information included in or incorporated by reference
into this prospectus. We have not authorized anyone to provide you with
information that is different. This prospectus may only be used where it is
legal to sell these shares. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common
stock.
PROSPECTUS
SUMMARY
The
following summary is qualified in its entirety by the more detailed information,
financial statements and other data appearing elsewhere in this prospectus.
At
various places in this prospectus, we may make reference to the “company” or
“us” or “we.” When we use those terms, unless the context otherwise requires, we
mean GeoGlobal Resources Inc. and its wholly-owned subsidiaries.
GeoGlobal
Resources Inc.
GeoGlobal
Resources Inc. is engaged, through subsidiaries and joint ventures in which
we
are a participant, in the exploration for and development of oil and natural
gas
reserves. At present, these activities are being undertaken in locations where
we and our joint venture participants have been granted exploration rights
pursuant to agreements we have entered into with the Government of India. As
of
December 31, 2005, we have entered into agreements with respect to six of these
exploration blocks as follows:
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The
first of our agreements, entered into in February 2003, grants exploration
rights in an area offshore eastern India. We refer to this as the
“KG
Block” and we have a net 5% carried interest under this agreement.
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We
have entered into two agreements which grant exploration rights in
areas
onshore in the Cambay Basin in the State of Gujarat in western India.
These agreements were entered into with the Government of India in
February 2004 and we have a 10% participating interest under each
of these
agreements. We refer to these as the “Mehsana Block” and the
“Sanand/Mirola Block.”
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·
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In
April 2005, we entered into an agreement with Gujarat State Petroleum
Corporation Limited (“GSPC”), providing for our purchase and the sale by
GSPC, subject to Government of India consent, of a 20% participating
interest in the agreement granting exploration rights onshore in
the
Cambay Basin in the State of Gujarat. We refer to this as the “Tarapur
Block”.
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On
September 23, 2005, we signed agreements with respect to two additional
locations. One area is located onshore in the Cambay Basin located
in the
State of Gujarat south-east of our three existing Cambay blocks in
which
we hold a 10% participating interest. The second area is onshore
in the
Deccan Syneclise Basin located in the northern portion of the State
of
Maharashtra in west-central India for which we hold a 100% participating
interest.
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All
of
our exploration activities should be considered highly
speculative.
The
Offering
Offering
of Common Stock by the Selling Securityholders7,877,894
Shares
to
be outstanding after the offering of common stock66,061,099(1)
and
exercise of the Compensation Options assuming all the
Compensation
Options are exercised
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(1) |
Based
on the number of shares of common stock issued and outstanding on
December
31, 2005. Inclusive of 195,144 shares issuable on exercise of compensation
options issued in September 2005, 2,126,200 shares issuable on exercise
of
common stock purchase warrants issued in September 2005 and 785,500
shares
issuable on exercise of common stock purchase warrants issued in
December
2003.
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Use
of Proceeds
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We
will not realize any of the proceeds from the sale of the shares
offered
by the Selling Securityholders. See “Use of Proceeds.” Of the shares
included in this prospectus, 3,106,844 are issuable on exercise of
our
outstanding common stock purchase warrants and compensation options
issued
in September 2005 and December 2003. In the event all our outstanding
common stock purchase warrants and compensation options are exercised,
we
will receive aggregate proceeds of $22,367,986 which will be added
to our
general corporate funds and used for working capital. There can be
no
assurance those warrants or options will be exercised or the proceeds
received.
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Market
Symbol (American Stock Exchange)
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GGR
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Risk
Factors
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Before
investing in our common stock, you should carefully read and
consider the
information set forth in “Risk Factors” beginning on page 7 of this
prospectus.
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Our
Offices
Our
executive offices are located at 630 - 4th
Avenue,
SW, Suite 200, Calgary, Alberta, Canada T2P 0J9. Our telephone number is
403-777-9250.
Extension
of Expiration Date of 785,500 Warrants
This
prospectus relates to the sale of 785,500 shares of our common stock issuable
on
exercise of outstanding common stock purchase warrants, among other securities.
These common stock purchase warrants, along with shares of our common stock,
were issued by us in December 2003 in a private sale of our securities. The
common stock purchase warrants expired by their terms on December 23, 2005.
By
action of our Board of Directors taken on December 8, 2005, the expiration
date
of the 785,500 common stock purchase warrants was extended to the close of
business on a date thirty (30) calendar days, after the date this registration
statement of which this prospectus is a part is declared effective by the
Securities and Exchange Commission, or the close of business on the first
business day after the expiration of such thirty calendar days if the thirtieth
day is not a business day. The exercise price of the 785,500 common stock
purchase warrants is $2.50 per share.
RISK
FACTORS
An
investment in shares of our common stock involves a high degree of risk. You
should consider the following factors, in addition to the other information
contained in this prospectus, in evaluating our business and current and
proposed activities before you purchase any shares of our common stock. You
should also see the “Cautionary Statement for Purposes of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995” regarding
risks and uncertainties relating to us and to forward-looking statements in
this
prospectus.
There
can
be no assurance that the exploratory drilling to be conducted on the exploration
blocks in which we hold an interest will result in any discovery of hydrocarbons
or that any hydrocarbons that are discovered will be in commercially recoverable
quantities. In addition, the realization of any revenues from commercially
recoverable hydrocarbons is dependent upon the ability to deliver, store and
market any hydrocarbons that are discovered. The presence of hydrocarbon
reserves on contiguous properties is no assurance or necessary indication that
hydrocarbons will be found in commercially marketable quantities on the
exploration blocks in which we hold an interest.
Risks
Relating to Our Oil and Gas Activities
Because
We Are In the Early Stage Of Developing Our Activities, There Are Considerable
Risks That We Will Be Unsuccessful
We
are in
the early stage of developing our operations. Our only activities in the oil
and
natural gas exploration and production industry have primarily involved entering
into five Production Sharing Contracts with the Government of India. In
addition, we have entered into an agreement to acquire a participating interest
in a sixth Production Sharing Contract, subject to Government of India consent.
We have realized no revenues from our oil and natural gas exploration and
development activities and claim no reserves of oil or natural gas. As of
December 31, 2005 a venture in which we have a net 5% interest, has drilled
and
abandoned two wells, has tested and is evaluating a third well and is engaged
in
drilling a fourth well. As of December 31, 2005, we claim no reserves of
hydrocarbons as a result of those drilling, testing and evaluation activities.
Our current plans are to conduct the exploration and development activities
on
the areas offshore and onshore India in accordance with the terms of the
Production Sharing Contracts we are parties to. There can be no assurance that
the exploratory drilling to be conducted on the exploration blocks in which
we
hold or have agreed to acquire an interest will result in any discovery of
hydrocarbons or that any hydrocarbons that are discovered will be in
commercially recoverable quantities. In addition, the realization of any
revenues from commercially recoverable hydrocarbons is dependent upon the
ability to deliver, store and market any hydrocarbons that are discovered.
The
presence of hydrocarbon reserves on contiguous properties is no assurance or
necessary indication that hydrocarbons will be found in commercially marketable
quantities on the exploration blocks in which we hold an interest. Our
exploration opportunities are highly speculative and should any of these
opportunities not result in the discovery of commercial quantities of oil and
gas reserves, our investment in the venture could be lost.
Our
business plans also include seeking to enter into additional joint ventures
or
other arrangements to acquire interests in additional government created and
granted hydrocarbon exploration opportunities, primarily located onshore or
in
the offshore waters of India. Opportunities to acquire interests in exploration
opportunities will be dependent upon our ability to identify, negotiate and
enter into joint venture or other similar arrangements with respect to specific
exploration opportunities and upon our ability to raise sufficient capital
to
fund our participation in those joint ventures or other exploration activities.
Our success will be dependent upon the success of the exploration activities
of
the ventures in which we acquire an interest.
Our
Interests In The Production Sharing Contracts Involve Highly Speculative
Exploration Opportunities That Involve Material Risks That We Will Be
Unsuccessful
Our
interests in the exploration blocks should be considered to be highly
speculative exploration opportunities that will involve material risks. None
of
the exploration blocks in which we have an interest have any proven reserves
and
are not producing any quantities of oil or natural gas. Exploratory drilling
activities are subject to many risks, including the risk that no commercially
productive reservoirs will be encountered. There can be no assurance that wells
drilled on any of the exploration blocks in which we have an interest or by
any
venture in which we may acquire an interest in the future will be productive
or
that we will receive any return or recover all or any portion of our investment.
Drilling for oil and gas may involve unprofitable efforts, not only from dry
wells, but from wells that are productive but do not produce sufficient net
revenues to return a profit after drilling, operating and other costs. The
cost
of drilling, completing and operating wells is often uncertain. Drilling
operations may be curtailed, delayed or canceled as a result of numerous
factors, many of which are beyond the operator’s control, including economic
conditions, mechanical problems, title problems, weather conditions, compliance
with governmental requirements and shortages or delays of equipment and
services. Drilling activities on the exploration blocks in which we hold an
interest may not be successful and, if unsuccessful, such failure may have
a
material adverse effect on our future results of operations and financial
condition.
Possible
Inability of Contracting Parties to Fulfill Phase One of the Minimum Work
Program for the KG Block
Under
the
terms of our Production Sharing Contract relating to the KG Block, the first
phase of the exploration period expired on September 11, 2005. The Production
Sharing Contract provides that by the end of the first phase, the contracting
parties, in addition to other parts of the work program which have been
completed, shall have drilled at least fourteen wells. Through September 11,
2005, three wells had been drilled on the exploration block, leaving eleven
wells to be drilled. The Production Sharing Contract provides that, if at the
end of an exploration phase, a work program for that phase is not completed,
the
time for completion of the exploration program for that phase is to be extended
for a period necessary to enable completion but not exceeding six months
provided the parties (i) submit a request by written notice to the Government
of
India at least thirty days prior to the expiration of the relevant phase, (ii)
can show technical or other good reasons for the non-completion of the work
program, and (iii) the management committee gives its consent to the extension.
Any such extension that is granted is to be deducted from the next succeeding
exploration phase. On August 5, 2005, a written notice requesting the six month
extension was submitted and on August 29, 2005, the management committee
consented to the extension of six months to March 11, 2006 and deducted the
six
month extension from the Phase II exploration period.
In
the
event the eleven additional wells are not drilled by March 11, 2006, the
Government of India would have the right to assert that the contracting parties
have failed to comply with or have contravened a material provision of the
Production Sharing Contract. Under such circumstances, the Production Sharing
Contract will be subject to termination by the Government of India on ninety
days written notice, unless such failure of compliance or contravention is
remedied within the ninety-day period or such extended period as may be granted
by the Government of India. In the event the Production Sharing Contract is
terminated by the Government of India, or in the event the work program is
not
fulfilled by the end of the relevant exploration phase, each party to the
Production Sharing Contract is to pay to the Government of India its
participating interest share of an amount which is equal to the amount that
would be required to complete the minimum work program for that phase. We are
of
the view that GSPC, under the terms of our Carried Interest Agreement, would
be
liable for our participating interest share of the amount required to complete
the minimum work program for the phase. However, termination of the Production
Sharing Contract by the Government of India would result in the loss of our
interest in the KG Block other than areas determined to encompass commercial
discoveries.
Because
Our Activities Have Only Recently Commenced And We Have No Operating History
Or
Reserves Of Oil And Gas, We Anticipate Future Losses; There Is No Assurance
Of
Our Profitability
Our
oil
and natural gas operations have been only recently established and we have
no
operating history, oil and gas reserves or assets upon which an evaluation
of
our business, our current business plans and our prospects can be based. Our
prospects must be considered in light of the risks, expenses and problems
frequently encountered by all companies in their early stages of development
and, in particular, those engaged in exploratory oil and gas activities. Such
risks include, without limitation:
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We
will experience failures to discover oil and gas in commercial
quantities;
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There
are uncertainties as to the costs to be incurred in our exploratory
drilling activities and cost overruns are
possible;
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There
are uncertain costs inherent in drilling into unknown formations,
such as
over-pressured zones and tools lost in the hole; and
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We
may make changes in our drilling plans and locations as a result
of prior
exploratory drilling.
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During
the exploration phase prior to the start date of initial commercial production,
we have a carried interest in the exploration activities on KG Block. Our
interests in our other five exploration blocks are participating interests
which
require us to pay our proportionate share of exploration, drilling and
development expenses on these blocks substantially as those expenses are
incurred. Unexpected or additional costs can affect the commercial viability
of
producing oil and gas from a well and will affect the time when and amounts
that
we can expect to receive from any production from a well. Because our carried
costs of exploration and drilling on KG Block are to be repaid in full to GSPC,
the operator of our venture’s activities on the block, before we are entitled to
any share of production, additional exploration and development expenses will
reduce and delay any share of production and revenues we will receive.
There
can
be no assurance that the ventures in which we are a participant will be
successful in addressing these risks, and any failure to do so could have a
material adverse effect on our prospects for the future. Our operations were
recently established, and as such, we have no substantial operating history
to
serve as the basis to predict our ability to further the development of our
business plan. Likewise, the outcome of our exploratory drilling activities,
as
well as our quarterly and annual operating results cannot be predicted.
Consequently, we believe that period to period comparisons of our exploration,
development, drilling and operating results will not necessarily be meaningful
and should not be relied upon as an indication of our stage of development
or
future prospects. Through December 31, 2005, we have had to abandon two wells
drilled on the KG Block and it is likely that in some future quarters our stage
of development or operating or drilling results may fall below our expectations
or the expectations of securities analysts and investors and that some of our
drilling results will be unsuccessful and the wells plugged. In such event,
the
trading price of our common stock may be materially and adversely affected.
We
Expect to Have Substantial Requirements For Additional Capital That May Be
Unavailable To Us Which Could Limit Our Ability To Participate In Our Existing
and Additional Ventures Or Pursue Other Opportunities. Our Available Capital
is
Limited
In
order
to participate under the terms of our Production Sharing Contracts as well
as in
further joint venture arrangements leading to the possible grant of exploratory
drilling opportunities, we will be required to contribute or have available
to
us material amounts of capital. Under the terms of our carried interest
agreement relating to the KG Block, after the start date of initial commercial
production on the KG Block, and under the terms of the five additional
Production Sharing Contracts we are parties to, as well as the agreement
relating to the acquisition of the 20% participating interest in the Tarapur
Block, we are required to bear our proportionate share of costs during the
exploration phases of those agreements. There can be no assurance that this
capital will be available to us in the amounts and at the times required. Such
capital also may be required to secure bonds in connection with the grant of
exploration rights, to conduct or participate in exploration activities or
be
engaged in drilling and completion activities. We intend to seek the additional
capital to meet our requirements from equity and debt offerings of our
securities. Our ability to access additional capital will depend in part on
the
success of the ventures in which we are a participant in locating reserves
of
oil and gas and developing producing wells on the exploration blocks, the
results of our management in locating, negotiating and entering into joint
venture or other arrangements on terms considered acceptable, as well as the
status of the capital markets at the time such capital is sought. There can
be
no assurance that capital will be available to us from any source or that,
if
available, it will be at prices or on terms acceptable to us. Should we be
unable to access the capital markets or should sufficient capital not be
available, our activities could be delayed or reduced and, accordingly, any
future exploration opportunities, revenues and operating activities may be
adversely affected and could also result in our breach of the terms of a
Production Sharing Contracts which could result in the loss of our rights under
the contract.
As
of
September 30, 2005, we had cash and cash equivalents of approximately $36.0
million. We currently expect that our available cash will be sufficient to
fund
through December 2006 at the present level of operations our required capital
expenditures on the five exploration blocks in which we are currently a
participant and our participation in the Tarapur Block in which we agreed to
acquire a 20% participating interest. Our present estimate of our commitments
pursuant to the terms of our PSC’s relating to these exploration blocks
including the agreements signed on September 23, 2005, totals approximately
$4.43 million during the period October 1, 2005 through March 31, 2006, and
$6.0
million during the twelve months ended March 31, 2007. Any further Production
Sharing Contacts we may seek to enter into or any expanded scope of our
operations or other transactions that we may enter into may require us to fund
our participation or capital expenditures with amounts of capital not currently
available to us. We may be unsuccessful in raising the capital necessary to
meet
these capital requirements. There can be no assurance that we will be able
to
raise the capital.
Pursuant
to our agreement executed on April 7, 2005 to acquire a 20% participating
interest from GSPC in the Tarapur Block (“Tarapur”), we paid to GSPC the sum of
approximately Rs. 2.53 Crore (approximately $580,000). In addition, it is
expected that under the terms of our agreement with GSPC the total capital
we
will be required to contribute to exploration activities on Tarapur during
the
fourth quarter of 2005 based on our 20% participating interest will be
approximately $300,000. Further, we have committed to expend an aggregate of
approximately $1.2 million for exploration activities under the terms of the
agreement over the period ending November 22, 2007. Our agreement with GSPC
is
subject to obtaining the Government of India consent. In the event such consent
is not obtained, the assignment would be terminated. Under such circumstances,
we intend to seek to negotiate an alternative acceptable arrangement with GSPC.
In the event the Government of India does not reject in writing the application
for consent to the assignment within 180 days, it is deemed approved. We intend
that such an alternative acceptable arrangement would include provisions that
would place us in an economic position substantially equivalent to the position
we would have held if the consent of the Government of India had been obtained
and the assignment of the interest effected. We do not have an alternative
agreement or understanding with GSPC in effect, and we cannot make any assurance
that such an alternative arrangement can be entered into with GSPC. In the
event
such an arrangement is not entered into we would seek to have the moneys
advanced by us to GSPC returned to us. There can be no assurance that the
Government of India consent will be obtained or that we will be successful
in
having the moneys advanced to GSPC returned to us if an acceptable alternative
arrangement is not available to us.
India’s
Regulatory Regime May Increase Our Risks And Expenses Of Doing
Business
All
phases of the oil and gas exploration, development and production activities
in
which we are participating are regulated in varying degrees by the Indian
government, either directly or through one or more governmental entities. The
areas of government regulation include matters relating to restrictions on
production, price controls, export controls, income taxes, expropriation of
property, environmental protection and rig safety. In addition, the award of
a
Production Sharing Contract is subject to Government of India consent and
matters relating to the implementation and conduct of operations under the
Production Sharing Contract is subject, under certain circumstances, to
Government of India consent. As a consequence, all future drilling and
production programs and operations we undertake or are undertaken by the
ventures in which we participate must be approved by the Indian government.
Shifts in political conditions in India could adversely affect our business
in
India and the ability to obtain requisite government approvals in a timely
fashion or at all. We, and our joint venture participants, must maintain
satisfactory working relationships with the Indian government. This regulatory
environment may increase the risks associated with our intended exploration
and
productivity activities and increase our costs of doing business.
Our
Control By Directors And Executive Officers May Result In Those Persons Having
Interests Divergent From Our Other Stockholders
As
of
December 31, 2005, our Directors and executive officers and their respective
affiliates, in the aggregate, beneficially hold 34,034,067 shares or
approximately 54.1% of our outstanding Common Stock. As a result, these
stockholders possess significant influence over us, giving them the ability,
among other things, to elect a majority of our Board of Directors and approve
significant corporate transactions. These persons will retain significant
control over our present and future activities and our other stockholders and
investors may be unable to meaningfully influence the course of our actions.
These persons may have interests regarding the future activities and
transactions in which we engage which may diverge from the interests of our
other stockholders. Such share ownership and control may also have the effect
of
delaying or preventing a change in control of us, impeding a merger,
consolidation, takeover or other business combination involving us, or
discourage a potential acquiror from making a tender offer or otherwise
attempting to obtain control of us which could have a material adverse effect
on
the market price of our Common Stock. Although management has no intention
of
engaging in such activities, there is also a risk that the existing management
will be viewed as pursuing an agenda which is beneficial to themselves at the
expense of other stockholders.
Our
Reliance On A Limited Number Of Key Management Personnel Imposes Risks On Us
That We Will Have Insufficient Management Personnel Available If The Services
Of
Any Of Them Are Unavailable
We
are
dependent upon the services of our President and Chief Executive Officer, Jean
Paul Roy, and Executive Vice President and Chief Financial Officer, Allan J.
Kent. The loss of either of their services could have a material adverse effect
upon us. We currently do not have employment agreements with either of such
persons or key man life insurance. The services of both Mr. Roy and Mr. Kent
are
provided pursuant to the terms of agreements with corporations wholly-owned
by
each of them. At present, Mr. Kent’s services are provided through an oral
agreement with the corporation he owns. Accordingly, these agreements do not
contain any provisions whereby Mr. Roy and Mr. Kent have direct contractual
obligations to us to provide services or refrain from other
activities.
At
present, our future is substantially dependent upon the geological and
geophysical capabilities of Mr. Roy to locate oil and gas exploration
opportunities for us and the ventures in which we are a participant. His
inability to do the foregoing could materially adversely affect our future
activities. We have entered into a three-year Technical Services Agreement
with
Roy Group (Barbados) Inc. dated August 29, 2003, a company owed 100% by Mr.
Roy,
to perform such geological and geophysical duties and exercise such powers
related thereto as we may from time to time assign to it. We have no agreement
directly with Mr. Roy regarding his services to us.
Our
Success Is Largely Dependent On The Success Of The Operators Of The Ventures
In
Which We Participate And Their Failure Or Inability To Properly Or Successfully
Operate The Oil And Gas Exploration, Development And Production Activities
On An
Exploration Block, Could Materially Adversely Affect Us
At
present, our only oil and gas interests are our rights under the terms of the
five Production Sharing Contracts with the Government of India that we have
entered into and the assignment agreement with GSPC, effective only upon
obtaining Government of India consent, relating to an interest in the Tarapur
Block. We are not and will not be the operator of any of the exploration,
drilling and production activities conducted on four of these exploration
blocks. Accordingly, the realization of successes in the exploration of the
blocks is substantially dependent upon the success of the operators in exploring
for and developing reserves of oil and gas and their ability to market those
reserves at prices that will yield a return to us.
Under
the
terms of our carried interest agreement for the KG Block, we have a carried
interest in the exploration activities conducted by the parties on the KG Block
prior to the start date of initial commercial production. However, under the
terms of that agreement, all of our proportionate share of capital costs for
exploration and development activities must be repaid without interest over
the
projected production life or ten years, whichever is less. Our proportionate
share of these costs and expenses expected to be incurred over the 6.5 year
term
of the Production Sharing Contract for which our interest is carried is
estimated to be approximately $22.0 million, including the $5.0 million
attributable to us as of December 31, 2004 and $9.3 million attributable to
us
as of September 30, 2005, of which 50% is for the account of Roy Group
(Mauritius) Inc. Additional expenditures may be required for cost overruns
and
completions of commercially successful wells. We are unable to estimate the
amount of additional expenditures GSPC will make as operator attributable to
us
prior to the start date of initial commercial production under the carried
interest agreement or when, if ever, any commercial production will commence.
Of
these expenditures, 50% are for the account of Roy Group (Mauritius) Inc. under
the terms of the Participating Interest Agreement between us and Roy Group
(Mauritius) Inc. We are not entitled to any share of production from the KG
Block until such time as the expenditures attributed to us, including those
expenditures made for the account of Roy Group (Mauritius) Inc., under the
carried interest agreement, have been recovered by GSPC from future production
revenue. Therefore, we are unable to estimate when we may commence to receive
distributions from any production of hydrocarbon reserves found on the KG Block.
As provided in the carried interest agreement, in addition to repaying our
proportionate share of capital costs incurred for which we were carried, we
will
be required to bear our proportionate share of the expenditures attributable
to
us after the start date of initial commercial production on the KG Block.
Certain
Terms Of The Production Sharing Contracts May Create Additional Expenses And
Risks That Could Adversely Affect Our Revenues And
Profitability
The
Production Sharing Contracts contain certain terms that may affect the revenues
of the joint venture participants to the agreements and create additional risks
for us. These terms include, possibly among others, the following:
§ |
The
venture participants are required to complete certain minimum work
programs during the three phases of the term of the Production Sharing
Contracts. In the event the venture participants fail to fulfill
any of
these minimum work programs, the parties to the venture must pay
to the
Government of India their proportionate share of the amount that
would be
required to complete the minimum work program. Accordingly, we could
be
called upon to pay our proportionate share of the estimated costs
of any
incomplete work programs;
|
§ |
Until
such time as the Government of India attains self sufficiency in
the
production of crude oil and condensate and is able to meet its national
demand, the parties to the venture are required to sell in the Indian
domestic market their entitlement under the Production Sharing Contacts
to
crude oil and condensate produced from the exploration blocks. In
addition, the Indian domestic market has the first call on natural
gas
produced from the exploration blocks and the discovery and production
of
natural gas must be made in the context of the government’s policy of
utilization of natural gas and take into account the objectives of
the
government to develop its resources in the most efficient manner
and
promote conservation measures. Accordingly, this provision could
interfere
with our ability to realize the maximum price for our share of production
of hydrocarbons;
|
§ |
The
parties to each agreement that are not Indian companies, which includes
us, are required to negotiate technical assistance agreements with
the
Government of India or its nominee whereby such foreign company can
render
technical assistance and make available commercially available technical
information of a proprietary nature for use in India by the government
or
its nominee, subject, among other things, to confidentiality restrictions.
Although not intended, this could increase each venture’s and our cost of
operations; and
|
§ |
The
parties to each venture are required to give preference, including
the use
of tender procedures, to the purchase and use of goods manufactured,
produced or supplied in India provided that such goods are available
on
equal or better terms than imported goods, and to employ Indian
subcontractors having the required skills insofar as their services
are
available on comparable standards and at competitive prices and terms.
Although not intended, this could increase the venture’s and our cost of
operations.
|
These
provisions of the Production Sharing Contracts, possibly among others, may
increase our costs of participating in the ventures and thereby affect our
profitability.
Oil
And Gas Prices Fluctuate Widely And Low Oil And Gas Prices Could Adversely
Affect Our Financial Results
There
is
no assurance that there will be any market for oil or gas produced from the
exploration blocks in which we hold an interest and our ability to deliver
the
production from any wells may be constrained by the absence of or limitations
on
collector systems and pipelines. Future price fluctuations could have a major
impact on the future revenues from any oil and gas produced on these exploration
blocks and thereby our revenue, and materially affect the return from and the
financial viability of any reserves that are claimed. Historically, oil and
gas
prices and markets have been volatile, and they are likely to continue to be
volatile in the future. A significant decrease in oil and gas prices could
have
a material adverse effect on our cash flow and profitability and would adversely
affect our financial condition and the results of our operations. In addition,
because world oil prices are quoted in and trade on the basis of U.S. dollars,
fluctuations in currency exchange rates that affect world oil prices could
also
affect our revenues. Prices for oil and gas fluctuate in response to relatively
minor changes in the supply of and demand for oil and gas, market uncertainty
and a variety of additional factors that are beyond our control, including:
§ |
political
conditions in oil producing regions, including the Middle East and
elsewhere;
|
§ |
the
domestic and foreign supply of oil and gas;
|
§ |
quotas
imposed by the Organization of Petroleum Exporting Countries upon
its
members;
|
§ |
the
level of consumer demand;
|
§ |
domestic
and foreign government regulations;
|
§ |
the
price and availability of alternative fuels;
|
§ |
overall
economic conditions; and
|
§ |
international
political conditions.
|
In
addition, various factors may adversely affect the ability to market oil and
gas
production from the exploration block, including:
§ |
the
capacity and availability of oil and gas gathering systems and pipelines;
|
§ |
the
ability to produce oil and gas in commercial quantities and to enhance
and
maintain production from existing wells and wells proposed to be
drilled;
|
§ |
the
proximity of future hydrocarbon discoveries to oil and gas transmission
facilities and processing equipment (as well as the capacity of such
facilities);
|
§ |
the
effect of governmental regulation of production and transportation
(including regulations relating to prices, taxes, royalties, land
tenure,
allowable production, importing and exporting of oil and condensate
and
matters associated with the protection of the
environment);
|
§ |
the
imposition of trade sanctions or embargoes by other
countries;
|
§ |
the
availability and frequency of delivery vessels;
|
§ |
changes
in supply due to drilling by others;
|
§ |
the
availability of drilling rigs; and
|
Our
Ability To Locate And Participate In Additional Exploration Opportunities And
To
Manage Growth May Be Limited By Reason Of Our Limited History Of Operations
And
The Limited Size Of Our Staff
While
our
President and Executive Vice President have had extensive experience in the
oil
and gas exploration business, we have been engaged in limited activities in
the
oil and gas business over approximately the past two years and have a limited
history of activities upon which you may base your evaluation of our
performance. As a result of our brief operating history and limited activities
in oil and gas exploration activities, our success to date in entering into
ventures to acquire interests in exploration blocks may not be indicative that
we will be successful in entering into any further ventures. There can be no
assurance that we will be successful in growing our oil and gas exploration
and
development activities.
Any
future significant growth in our oil and gas exploration and development
activities will place demands on our executive officers, and any increased
scope
of our operations will present challenges to us due to our current limited
management resources. Our future performance will depend upon our management
and
their ability to locate and negotiate opportunities to participate in joint
venture and other arrangements whereby we can participate in exploration
opportunities. There can be no assurance that we will be successful in these
efforts. Our inability to locate additional opportunities, to hire additional
management and other personnel or to enhance our management systems could have
a
material adverse effect on our results of operations.
Our
Future Performance Depends Upon Our Ability And The Ability Of The Ventures
In
Which We Participate To Find Or Acquire Oil And Gas Reserves That Are
Economically Recoverable
Our
success in developing our oil and gas exploration and development activities
will be dependent upon establishing, through our participation with others
in
joint ventures and other similar activities, reserves of oil and gas and
maintaining and possibly expanding the levels of those reserves. We and the
joint ventures in which we may participate may not be able to locate and
thereafter replace reserves from exploration and development activities at
acceptable costs. Lower prices of oil and gas may further limit the kinds of
reserves that can be developed at an acceptable cost. The business of exploring
for, developing or acquiring reserves is capital intensive. We may not be able
to make the necessary capital investment to enter into joint ventures or similar
arrangements to maintain or expand our oil and gas reserves if capital is
unavailable to us and the ventures in which we participate. In addition,
exploration and development activities involve numerous risks that may result
in
dry holes, the failure to produce oil and gas in commercial quantities, the
inability to fully produce discovered reserves and the inability to enhance
production from existing wells.
We
expect
that we will continually seek to identify and evaluate joint venture and other
exploration opportunities for our participation as a joint venture participant
or through some other arrangement. Our ability to enter into additional
exploration activities will be dependent to a large extent on our ability to
negotiate arrangements with others and with various governments and governmental
entities whereby we can be granted a participation in such ventures. There
can
be no assurance that we will be able to locate and negotiate such arrangements,
have sufficient capital to meet the costs involved in entering into such
arrangements or that, once entered into, that such exploration activities will
be successful. Successful acquisition of exploration opportunities can be
expected to require, among other things, accurate assessments of potential
recoverable reserves, future oil and gas prices, projected operating costs,
potential environmental and other liabilities and other factors. Such
assessments are necessarily inexact, and as estimates, their accuracy is
inherently uncertain. We cannot assure you that we will successfully consummate
any further exploration opportunities or joint venture or other arrangements
leading to such opportunities.
Estimating
Reserves And Future Net Revenues Involves Uncertainties And Oil And Gas Price
Declines May Lead To Impairment Of Oil And Gas Assets
Currently,
we have no proved reserves of oil or gas. Any reserve information that we may
provide in the future will represent estimates based on reports prepared by
independent petroleum engineers, as well as internally generated reports.
Petroleum engineering is not an exact science. Information relating to proved
oil and gas reserves is based upon engineering estimates derived after analysis
of information we furnish or furnished by the operator of the property.
Estimates of economically recoverable oil and gas reserves and of future net
cash flows necessarily depend upon a number of variable factors and assumptions,
such as historical production from the area compared with production from other
producing areas, the assumed effects of regulations by governmental agencies
and
assumptions concerning future oil and gas prices, future operating costs,
severance and excise taxes, capital expenditures and workover and remedial
costs, all of which may in fact vary considerably from actual results. Oil
and
gas prices, which fluctuate over time, may also affect proved reserve estimates.
For these reasons, estimates of the economically recoverable quantities of
oil
and gas attributable to any particular group of properties, classifications
of
such reserves based on risk of recovery and estimates of the future net cash
flows expected therefrom prepared by different engineers or by the same
engineers at different times may vary substantially. Actual production, revenues
and expenditures with respect to reserves we may claim will likely vary from
estimates, and such variances may be material. Either inaccuracies in estimates
of proved undeveloped reserves or the inability to fund development could result
in substantially reduced reserves. In addition, the timing of receipt of
estimated future net revenues from proved undeveloped reserves will be dependent
upon the timing and implementation of drilling and development activities
estimated by us for purposes of the reserve report.
Quantities
of proved reserves are estimated based on economic conditions in existence
in
the period of assessment. Lower oil and gas prices may have the impact of
shortening the economic lives on certain fields because it becomes uneconomic
to
produce all recoverable reserves on such fields, thus reducing proved property
reserve estimates. If such revisions in the estimated quantities of proved
reserves occur, it will have the effect of increasing the rates of depreciation,
depletion and amortization on the affected properties, which would decrease
earnings or result in losses through higher depreciation, depletion and
amortization expense. The revisions may also be sufficient to trigger impairment
losses on certain properties that would result in a further non-cash charge
to
earnings.
Risks
Relating To The Market For Our Common Stock
Volatility
Of Our Stock Price
The
public market for our common stock has been characterized by significant price
and volume fluctuations. There can be no assurance that the market price of
our
common stock will not decline below its current or historic price ranges. The
market price may bear no relationship to the prospects, stage of development,
existence of oil and gas reserves, revenues, earnings, assets or potential
of
our Company and may not be indicative of our future business performance. The
trading price of our common stock could be subject to wide fluctuations.
Fluctuations in the price of oil and gas and related international political
events can be expected to affect the price of our common stock. In addition,
the
stock market in general has experienced extreme price and volume fluctuations
that have affected the market price for many companies which fluctuations have
been unrelated to the operating performance of these companies. These market
fluctuations, as well as general economic, political and market conditions,
may
have a material adverse effect on the market price of our company's common
stock. In the past, following periods of volatility in the market price of
a
company's securities, securities class action litigation has often been
instituted against such companies. Such litigation, if instituted, and
irrespective of the outcome of such litigation, could result in substantial
costs and a diversion of management's attention and resources and have a
material adverse effect on our company's business, results of operations and
financial condition.
Cautionary
Statement For Purposes Of The “Safe Harbor” Provisions Of The Private Securities
Litigation Reform Act Of 1995
With
the
exception of historical matters, the matters discussed in this prospectus are
“forward-looking statements” as defined under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that involve
risks
and uncertainties. Forward-looking statements made herein include, but are
not
limited to, the statements in this prospectus regarding our plans and objectives
relating to our future operations, plans and objectives regarding the
exploration, development and production activities conducted on the exploration
blocks in India in which we have interests, plans regarding drilling activities
intended to be conducted through the ventures in which we are a participant,
the
success of those drilling activities and our ability and the ability of the
ventures to complete any wells on the exploration blocks, to develop reserves
of
hydrocarbons in commercially marketable quantities, to establish facilities
for
the collection, distribution and marketing of hydrocarbons, to produce oil
and
natural gas in commercial quantities and to realize revenues from the sales
of
those hydrocarbons. Forward-looking statements also include our plans and
objectives to join with others or to directly seek to enter into or acquire
interests in additional Production Sharing Contracts with the Government of
India. Our assumptions, plans and expectations regarding our future capital
requirements, our plans and intentions regarding our plans to raise additional
capital, the costs and expenses to be incurred in conducting any exploration,
well drilling, development and production activities and the adequacy of our
capital to meet our requirements for our present level of activities are all
forward-looking statements. These statements appear, among other places, under
the following captions: “Risk Factors”, and “Management’s Discussion and
Analysis or Plan of Operation”. We cannot assure you that our assumptions or our
business plans and objectives discussed herein will prove to be accurate or
be
able to be attained. We cannot assure you that any commercially recoverable
quantities of hydrocarbon reserves will be discovered on the exploration blocks
in which we have an interest. Our ability to realize revenues cannot be assured.
Our ability to successfully drill, test and complete producing wells cannot
be
assured. We cannot assure you that we will have available to us the capital
required to meet our plans and objectives at the times and in the amounts
required. We cannot assure you that we will be successful in joining any further
ventures seeking to be granted Production Sharing Contracts by the Government
of
India or that we will be successful in acquiring interests in existing ventures.
We cannot assure you that the Government of India will consent to the assignment
by GSPC of the 20% participating interest in the Tarapur Block or that the
Company will be successful in entering into alternative acceptable arrangements
on commercially favorable terms with GSPC should that consent not be
forthcoming. If our plans fail to materialize, your investment will be in
jeopardy. We cannot assure you that the outcome of testing of one or more wells
on the KG Block will be satisfactory and result in a commercially-productive
well or that any further wells drilled on the KG Block will have
commercially-successful results. Our inability to meet our goals and objectives
or the consequences to us from adverse developments in general economic or
capital market conditions, events having international consequences, or military
activities could have a material adverse effect on us. We caution you that
various risk factors accompany those forward-looking statements and are
described, among other places, under the caption "Risk Factors" herein. They
are
also described in our Annual Reports on Form 10-KSB, our Quarterly Reports
on
Form 10-QSB, and our Current Reports on Form 8-K. These risk factors could
cause
our operating results, financial condition and ability to fulfill our plans
to
differ materially from those expressed in any forward-looking statements made
in
this prospectus and could adversely affect our financial condition and our
ability to pursue our business strategy and plans.
USE
OF PROCEEDS
This
prospectus relates solely to the common stock being offered and sold for the
account of the Selling Securityholders. We will not receive any of the proceeds
from the sale of the common stock being offered by the Selling Securityholders
but will pay all of the expenses related to the registration of the securities.
We estimate that these expenses will be approximately $25,000.00.
Of
the
shares included in this prospectus, 3,106,844 are issuable on exercise of our
outstanding compensation options and common stock purchase warrants. In the
event all the compensation options and common stock purchase warrants are
exercised by the Selling Securityholders, we will receive aggregate proceeds
of
$22,367,986. There can be no assurance those warrants or options will be
exercised or the proceeds received. Such proceeds will be added to our general
corporate funds and used for working capital purposes.
SELLING
SECURITYHOLDERS
The
following table sets forth the aggregate numbers of securities beneficially
owned by each Selling Securityholder as of September 15, 2005 and the aggregate
number of securities registered hereby that each Selling Securityholder may
offer and sell pursuant to this prospectus. Because the Selling Securityholders
may sell all or a portion of the securities at any time and from time to time
after the date hereof, no estimate can be made of the number of shares of common
stock that each Selling Securityholder may retain upon the completion of the
offering. The shares of common stock have been included in this prospectus
pursuant to contractual rights granted to the Selling Securityholders to have
their shares of common stock registered under the Securities Act. The
registration of these shares for resale does not necessarily mean that the
Selling Securityholder will sell any of the shares. Except as otherwise noted
below, none of the Selling Securityholders has held any position or office,
or
has had any other material relationship with us or any of our affiliates within
the past three years.
Name
of Selling Securityholder
|
Shares
Beneficially
Owned Prior to
this
Offering
|
Shares
Beneficially Owned
Offered
for Selling Securityholder Account (1)(2)
|
Shares
Beneficially
Owned
After
Offering
|
Percentage
of
Shares
Beneficially
Owned
After
Offering
|
2035718
Ontario Inc.(3)
|
82,500
|
82,500
|
-0-
|
*
|
Majed
Abdo
|
1,500
|
1,500
|
-0-
|
*
|
Robin
F. Adams
|
30,000
|
30,000
|
-0-
|
*
|
AGF
Funds Inc.(4)
|
750,000
|
750,000
|
-0-
|
*
|
Bank
Sal. Oppenheim jr. & Cie (Switzerland) Limited(5)
|
75,000
|
75,000
|
-0-
|
*
|
Bank
Julius Baer(6)
|
240,000
|
240,000
|
-0-
|
*
|
Brian
Bayley
|
175,000
|
175,000
|
-0-
|
*
|
BC
Steers & Co.(7)
|
5,250
|
5,250
|
-0-
|
*
|
Dr.
Alan Green Bonaventure
|
29,600
|
22,500
|
7,100
|
*
|
John
Boreta
|
180,000
|
150,000
|
30,000
|
*
|
Richard
Boxer
|
5,250
|
5,250
|
-0-
|
*
|
John
K. Campbell(8)
|
91,667
|
66,667
|
25,000
|
*
|
CIBC
Mellon(9)
|
30,640
|
30,640
|
-0-
|
*
|
Colonial
First State Wholesale Global Resources Fund(10)
|
330,000
|
330,000
|
-0-
|
*
|
Chesapeake
Limited(11)
|
7,500
|
7,500
|
-0-
|
*
|
Continental
Trust Corporation Ltd.(12)
|
150,000
|
150,000
|
-0-
|
*
|
Dakepa
Holdings Inc.(13)
|
5,000
|
5,000
|
-0-
|
*
|
Garth
J Davis
|
142,400
|
30,000
|
112,400
|
*
|
Barry
T. Davies
|
7,500
|
7,500
|
-0-
|
*
|
Robert
N. Depoe
|
75,000
|
75,000
|
-0-
|
*
|
Martin
Doane
|
15,000
|
15,000
|
-0-
|
*
|
Dynamic
Power Hedge Fund(14)
|
1,064,285
|
1,064,285
|
-0-
|
*
|
Dynamic
Power Small Cap Fund(15)
|
505,075
|
505,075
|
-0-
|
*
|
Jay
Egan
|
1,500
|
1,500
|
-0-
|
*
|
Gordon
D. Ewart
|
95,300
|
60,000
|
35,300
|
*
|
Jana
Ewart
|
87,500
|
87,500
|
-0-
|
*
|
First
State Investments Global
Resources
Long Short
Fund
Limited(16)
|
48,000
|
48,000
|
-0-
|
*
|
Global
(GMPC) Holdings Inc.(17)
|
112,500
|
112,500
|
-0-
|
*
|
Max
Glassman
|
13,250
|
13,250
|
-0-
|
*
|
Robin
E. Goad
|
15,000(18)
|
7,500
|
7,500
|
*
|
Deborah
Brown Goldstein
|
37,500
|
37,500
|
-0-
|
*
|
Stuart
Bruce Goldstein
|
120,000
|
120,000
|
-0-
|
*
|
Nicole
Gunther
|
10,000
|
10,000
|
-0-
|
*
|
Harbour
Foreign Equity Fund(19)
|
305,000
|
135,000
|
170,000
|
*
|
Harbour
Fund(19)
|
1,800,000
|
1,800,000
|
-0-
|
*
|
Gregory
R. Harris
|
261,500
|
261,500
|
-0-
|
*
|
Robert
C. Heilig
|
5,000
|
5,000
|
-0-
|
*
|
Mark
Henderson
|
12,000
|
12,000
|
-0-
|
*
|
Bradley
Neil Hollingsworth
|
52,500
|
52,500
|
-0-
|
*
|
Jones
Gable & Company Limited(20)(21)
|
292,716
|
195,144
|
97,572
|
*
|
John
Kehl
|
56,000
|
56,000
|
-0-
|
*
|
Scott
M. Kelly
|
4,500
|
4,500
|
-0-
|
*
|
Frank
Lucas
|
9,000
|
9,000
|
-0-
|
*
|
Andrew
Martyn
|
45,000
|
34,500
|
10,500
|
*
|
John
D. McBride
|
60,000
|
60,000
|
-0-
|
*
|
Edward
Louis Mercaldo
|
75,000
|
75,000
|
-0-
|
*
|
Michael
Murphy
|
11,000
|
2,000
|
9,000
|
*
|
Greg
Nixon
|
6,900
|
6,900
|
-0-
|
*
|
Chris
Paliare
|
15,000
|
15,000
|
-0-
|
*
|
Penang
Property Holdings Limited(22)
|
365,000
|
150,000
|
215,000
|
*
|
Pinetree
Resource Partnership(23)
|
262,500
|
262,500
|
-0-
|
*
|
John
A. Pollock Sr.
|
55,500
|
16,500
|
39,000
|
*
|
Michelle
Pollock
|
77,500
|
37,500
|
40,000
|
*
|
Mark
Quigley
|
3,000
|
3,000
|
-0-
|
*
|
Gretchen
Ross
|
16,500
|
16,500
|
-0-
|
*
|
Royal
Trust Company SA(24)
|
71,800
|
37,500
|
34,300
|
*
|
Rychel
Investment Ltd(25)
|
37,500
|
37,500
|
-0-
|
*
|
Mary
Sinclair
|
50,000
|
50,000
|
-0-
|
*
|
Irwin
Schwartz
|
7,500
|
7,500
|
-0-
|
*
|
Samantha
Sharpe
|
15,000
|
15,000
|
-0-
|
*
|
Stephen
Sharpe
|
43,800
|
43,800
|
-0-
|
*
|
Norman
Shelson
|
7,500
|
7,500
|
-0-
|
*
|
Somerly
Holdings Limited(26)
|
138,300
|
75,000
|
-0-
|
*
|
Morris
Tenaglia
|
83,200
|
45,000
|
38,200
|
*
|
Vijay
Thankey
|
3,000
|
3,000
|
-0-
|
*
|
The
K2 Principal Fund(27)
|
261,000
|
261,000
|
-0-
|
*
|
Ron
Torrance
|
1,950
|
1,950
|
-0-
|
*
|
Henry
Wegiel
|
3,500
|
1,500
|
2,000
|
*
|
West
Indies Trust Company Ltd.(28)
|
100,000
|
100,000
|
-0-
|
*
|
Yendor
Investments Ltd.(29)
|
107,500
|
107,500
|
-0-
|
*
|
* Less
than
1%.
(1) Unless
otherwise indicated, the securities were purchased from us in transactions
that
were completed on December 23, 2003, September 9, 2005 and September 12, 2005.
The securities were sold in units, each unit consisting of one share and
one-half of a warrant to purchase one share. The number of shares includes
the
shares issuable on exercise of the warrants.
(2) May
include securities sold subsequent to March 31, 2004 through September 15,
2005
included in our prospectus dated June 14, 2004. Selling Securityholders included
in our prospectus dated June 14, 2004 who have sold all of their registered
securities have been omitted from the table.
(3) Richard
Kung is the natural person who exercises voting and investment control over
the
shares.
(4) Charles
Oliver is the natural person who exercises voting and investment control over
the shares.
(5) Urs
Fricker and Christopher B. Nestel are the natural persons who exercise voting
and investment control over the shares.
(6) Mrs.
Annemarie Métrailler is the natural person who exercises voting and investment
control over the shares.
(7) Barry
Steers is the natural person who exercises voting and investment control over
the shares.
(8) Shares
purchased in August 2003 on exercise of options granted under our 1998 Stock
Incentive Plan. Mr. Campbell resigned as a Director of our Company on May 17,
2004.
(9) Alex
Lane
is the natural person who exercises voting and investment control over the
shares.
(10) David
Whitten, Dr. Joanne Warner and Dr. Chris Baker are the natural persons who
exercise voting and investment control over the shares.
(11) Robin
Ellis Goad, James Mathew Goad, Susan Carolyn Archibald and Dr. Heather Melinda
Goad are the natural persons who exercise voting and investment control over
the
shares.
(12) S.
Arthur
Morris, Colin G. Hames and Dudley R. Cottingham are the natural persons who
exercise voting and investment control over the shares.
(13) Jean
E.
Hudson is the natural person who exercises voting and investment control over
the shares.
(14) Rohit
Sehgal is the natural person who exercises voting and investment control over
the shares.
(15) Alex
Lane
is the natural person who exercises voting and investment control over the
shares.
(16) David
Whitten, Dr. Joanne Warner and Dr. Chris Baker are the natural persons who
exercise voting and investment control over the shares.
(17) Christopher
A. Carmichael is the natural person who exercises voting and investment control
over the shares.
((18) Includes
beneficial ownership of the shares held by Chesapeake Limited.
(19) Gerald
Coleman and Steve Jenkins are the natural persons who exercise voting and
investment control over the shares.
(20) In
September 2005, Jones Gable & Company Limited acted as agent for us in
connection with a sale of our securities in a transaction not requiring
registration under the Securities Act. In addition to a fee of $1,268,436,
Jones
Gable & Company Limited received an option to purchase up to 195,144 units
of our securities. The compensation option is exercisable at a price of $6.50
per unit and on exercise, Jones Gable & Company Limited will receive one
share of Common Stock and one-half of one common stock purchase warrant. Each
common stock purchase warrant is exercisable through September 13, 2007 at
an
exercise price of $9.00 per share. The 97,572 shares of common stock issuable
on
exercise of the warrants are not included in this offering. Jones Gable &
Company Limited also acted as co-agent for us in December 2003 in a sale of
our
securities in a transaction not requiring registration under the Securities
Act.
In addition to a cash fee of $39,600, Jones Gable & Company Limited received
an option to purchase 290,000 shares of Common Stock exercisable through
December 23, 2005 at an exercise price of $1.50 per share.
(21) John
D.
Gunther and Donald M Ross are the natural persons who exercise voting and
investment control over the shares.
(22) Valerie
E. Huxley is the natural person who exercises voting and investment control
over
the shares.
(23) Shelden
Inwentash is the natural person who exercises voting and investment control
over
the shares.
(24) William
Solloway is the natural person who exercises voting and investment control
over
the shares.
(25) William
Stanimir is the natural person who exercises voting and investment control
over
the shares.
(26) Donovan
G. Wijsmuller is the natural person who exercises voting and investment control
over the shares.
(27) Shawn
Kimel, Blair Schultz, David Heden, Glen Gibbons and Norman Kumar are the natural
persons who exercise voting and investment control over the shares.
(28) Fred
Baker is the natural person who exercises voting and investment control over
the
shares.
(29) Stephen
Sharpe is the natural person who exercises voting and investment control over
the shares.
PLAN
OF DISTRIBUTION
Following
the time that the registration statement of which this prospectus is a part
is
declared effective under the Securities Act of 1933, the Selling Securityholders
may sell or distribute some or all of the common stock from time to time through
underwriters or dealers or brokers or other agents or directly to one or more
purchasers, including pledgees, in transactions (which may involve block
transactions) or in privately negotiated transactions (including sales pursuant
to pledges), or in a combination of such transactions. Such transactions may
be
effected by the Selling Securityholders on the American Stock Exchange at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices, or at fixed prices, which may be changed.
Brokers, dealers, agents or underwriters participating in such transactions
as
agent may receive compensation in the form of discounts, concessions or
commissions from the Selling Securityholders (and, if they act as agent for
the
purchaser of such shares, from such purchaser). Such discounts, concessions
or
commissions as to a particular broker, dealer, agent or underwriter might be
in
excess of those customary in the type of transaction involved.
Persons
who are pledges, donees, transferees, or other successors in interest of any
of
the named Selling Securityholders (including, but not limited to, persons who
receive shares from a named Selling Securityholder as a gift, partnership
distribution, or other non-sale-related transfer after the date of this
prospectus) may also use this prospectus and are included when we refer to
Selling Securityholder in this prospectus. If necessary, we would file a
supplement to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933 amending the list of Selling Securityholders
to
include the pledgee, donee, transferee or other successors in interest as
Selling Securityholders under this prospectus. Selling Securityholders may
sell
the shares by one or more of the following methods, without
limitation:
· |
block
trades (which may include cross trades) in which the broker or dealer
so
engaged will attempt to sell the shares as agent but may position
and
resell a portion of the block as principal to facilitate the
transaction;
|
· |
purchases
by a broker or dealer as principal and resale by the broker or dealer
for
its own account;
|
· |
an
exchange distribution or secondary distribution in accordance with
the
rules of any stock exchange or market on which the shares are
listed;
|
· |
ordinary
brokerage transactions and transactions in which the broker solicits
purchases;
|
· |
an
offering at other than a fixed price on or through the facilities
of any
stock exchange or market on which the shares are listed or to or
through a
market maker other than on that stock exchange or
market;
|
· |
privately
negotiated transactions, directly or through
agents;
|
· |
short
sales of shares and sales to cover short
sales;
|
· |
through
the writing of options on the shares, whether the options are listed
on an
options exchange or otherwise;
|
· |
through
the distribution of the shares by any selling shareholder to its
partners,
members of shareholders;
|
· |
one
or more underwritten offerings;
|
· |
agreements
between a broker or dealer and one or more of the selling shareholders
to
sell a specified number of the securities at a stipulated price per
share;
and
|
· |
any
combination of any of these methods of sale or distribution, or any
other
method permitted by applicable law.
|
The
Selling Securityholders and any such underwriters, brokers, dealers or agents
that participate in such distribution may be deemed to be “underwriters” within
the meaning of the Securities Act, and any discounts, commissions or concessions
received by any such underwriters, brokers, dealers or agents might be deemed
to
be underwriting discounts and commissions under the Securities Act. Neither
we
nor the Selling Securityholders can presently estimate the amount of such
compensation. We do not know of any existing arrangements between the Selling
Securityholders and any underwriter, broker, dealer or other agent relating
to
the sale or distribution of the Selling Securityholders’ Securities. If
necessary, we will file a supplement to this prospectus under Rule 424(b)(3)
or
other applicable provision of the Securities Act to disclose any such
arrangements made known to us by the Selling Securityholders.
Under
applicable rules and regulations currently in effect under the Securities
Exchange Act of 1934, as amended, any person engaged in a distribution of any
of
the shares of common stock may not simultaneously engage in market activities
with respect to the common stock for a period of five business days prior to
the
commencement of such distribution. In addition, and without limiting the
foregoing, the Selling Securityholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including without
limitation Regulation M thereunder, which provisions may limit the timing of
purchases and sales of any of the shares of common stock by the Selling
Securityholders. All of the foregoing may affect the marketability of the common
stock.
We
will
pay substantially all the expenses incident to this offering of the common
stock
to the public other than commissions and discounts of underwriters, brokers,
dealers or agents. The Selling Securityholders may indemnify any broker, dealer,
agent or underwriter that participates in transactions involving sales of the
securities against certain liabilities, including liabilities arising under
the
Securities Act. We estimate these expenses will total $25,000.
The
Selling Securityholders may also sell shares under Rule 144 under the Securities
Act if available, rather than under this prospectus. Rule 144 is available
for
the sale of restricted securities after a period of twelve months has expired
from the date the securities are purchased and fully paid for. Under the tacking
provisions of Rule 144, the twelve-month period will begin to run on the date
the shares of common stock were purchased and fully paid for. The holding period
for the shares issued on exercise of the common stock purchase warrants and
the
compensation options begins on the date the consideration for the purchase
is
paid in full. Rule 144 also imposes limitations on the amount of securities
that
can be sold and the manner of sale of the shares during the twelfth to
twenty-fourth month period after the purchase of and payment in full for the
securities. The limitation on the amount of securities that can be sold limits
a
Selling Securityholder to selling, including sales of shares made during the
preceding three months, an amount of shares not exceeding 1% of the shares
outstanding. This calculation is made without reflecting as outstanding shares
issuable on conversion or exercise of outstanding debt securities, options
or
warrants. The manner of sale provisions require that the shares be sold in
brokers’ transactions and that the person making the sale not solicit or arrange
for the solicitation of orders to purchase the securities in anticipation of
or
in connection with the sale or make any payment in connection with the offer
or
sale to any person other than the broker who executes the sale.
In
order
to be a broker’s transaction, the broker executing the sale can do nothing more
than execute the order to sell as agent for the person selling the shares and
receive no more than the customary commission. In addition, the broker cannot
solicit or arrange for the solicitation of orders to buy the shares or be aware
of circumstances indicating that the sale is a part of an unlawful distribution
of the shares in violation of the registration requirements of the Securities
Act. A notice of sale on Form 144 is to be filed with the U.S. Securities and
Exchange Commission at the time of making a Rule 144 sale.
After
a
period of twenty-four months has expired from the date the securities are
purchased and fully paid for and provided the shares are intended to be sold
by
a person who is not an “affiliate” of ours, the shares can be resold without
complying with the limitations on the amount of securities sold, the manner
of
sale provisions and the notice filing requirements of Rule 144 described above.
This would be characterized as a Rule 144(k) transaction. Persons who are deemed
to be “affiliates” of ours will continue to be required to comply with the
provisions of Rule 144 described above in making re-sales of shares after the
twenty-four month holding period.
LEGAL
MATTERS
The
validity of the issuance of the common stock offered hereby has been passed
upon
for us by William S. Clarke, P.A., Princeton, New Jersey.
EXPERTS
The
consolidated financial statements of GeoGlobal Resources Inc. as of December
31,
2004 and December 31, 2003 and for the years ended December 31, 2004, 2003,
and
for the period from inception on August 21, 2002 to December 31, 2002 and for
the cumulative period from inception on August 21, 2002 to December 31, 2004
incorporated by reference in this prospectus have been audited by Ernst &
Young LLP, Independent Registered Public Accounting Firm as set forth in their
report thereon incorporated by reference herein, and are included in reliance
upon such report, given on the authority of such firm as experts in auditing
and
accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We
are a
public company and file annual, quarterly and current reports, proxy statements
and other information with the Securities and Exchange Commission (SEC). Our
SEC
filings are available to the public over the Internet at the SEC's web site
at
http://www.sec.gov.
You may
also read and copy any document we file at the SEC's public reference room
at
100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the SEC's public reference room in Washington, D.C. by calling
the
SEC at 1-800-SEC-0330. We also file information with the American Stock
Exchange.
The
SEC
allows us to "incorporate by reference" into this prospectus the information
we
file with the SEC in other documents, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act, until the offering of securities by this
prospectus is completed:
· |
our
Annual Report on Form 10-KSB for the fiscal year ended December 31,
2004
filed with the SEC on March 31, 2005;
|
· |
our
amended Annual Report on Form 10-KSB/A for the fiscal year ended
December
31, 2004 filed with the SEC on August 2,
2005;
|
· |
our
Quarterly Report on Form 10-QSB for the quarter ended March 31, 2005
filed
with the SEC on May 23, 2005;
|
· |
our
amended Quarterly Report on Form 10-QSB/A for the quarter ended March
31,
2005 filed with the SEC on August 2,
2005;
|
· |
our
Quarterly Report on Form 10-QSB for the quarter ended June 30, 2005
filed
with the SEC on August 15, 2005;
|
· |
our
Quarterly Report on Form 10-QSB for the quarter ended September 30,
2005
filed with the SEC on November 17,
2005;
|
· |
our
definitive proxy statement for the 2005 Annual Meeting of Stockholders
filed with the SEC on May 17, 2005;
|
· |
our
Current Report on Form 8-K filed with the SEC on September 15, 2005;
|
· |
our
Current Report on Form 8-K filed with the SEC on September 29,
2005;
|
· |
our
Current Report on Form 8-K filed with the SEC on October 3, 2005;
|
· |
the
description of our common stock contained in our registration statement
on
Form 8-A (File No.001-32158) filed with the SEC on April 27,
2004.
|
All
documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and prior to the
termination of the offering are incorporated by reference into this
prospectus.
We
have
filed with the SEC a registration statement on Form S-3 under the Securities
Act
covering the securities described in this prospectus. This prospectus does
not
contain all of the information included in the registration statement, some
of
which is contained in exhibits included with or incorporated by reference into
the registration statement. The registration statement, including the exhibits
contained or incorporated by reference therein, can be read at the SEC's website
or at the SEC offices referred to above. Any statement made in this prospectus
concerning the contents of any contract, agreement or other document is only
a
summary of the actual contract, agreement or other document. If we have filed
or
incorporated by reference any contract, agreement or other document as an
exhibit to the registration statement, you should read the exhibit for a more
complete understanding of the document or matter involved. Each statement
regarding a contract, agreement or other document is qualified in its entirety
by reference to the actual document.
You
may
request a copy of these filings at no cost, by writing or telephoning us at
the
following address or telephone number:
GeoGlobal
Resources Inc.
630
- 4th Avenue, SW - Suite 200,
Calgary,
Alberta T2P 0J9
Attention:
Investor Relations
403-777-9250
Information
contained on our website is not part of this prospectus. You should rely only
on
the information contained or incorporated by reference in this prospectus.
We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The information contained in this prospectus
is
accurate only as of the date of this prospectus and, with respect to material
incorporated herein by reference, the dates of such referenced material.
26